A former FEMA supervisor and the owner of a disaster services company were indicted Friday by a federal grand jury on charges of conspiracy, wire fraud and witness tampering stemming from their participation in what the government contends was the illegal awarding of a contract worth up to $100 million to service and deactivate thousands of trailers in Plaquemines Parish in the aftermath of Hurricane Katrina.

View full sizeChris Granger, The Times-Picayune archiveA seemingly endless line of FEMA trailers heads into New Orleans by rail in December of 2005.

If convicted of the conspiracy and wire fraud charges, former FEMA employee Robert Blevins, 74, of South Carolina, and 3-D Disaster Services Inc. owner David Dangler, 58, of Roatan, Honduras, face a maximum of 25 years in prison and $500,000 in fines. Blevins also faces up to three years in prison on the witness-tampering charge.

Prosecutors also will attempt to recover $31 million paid to the disaster services company.

Blevins was an accounting property officer and contracting officer’s technical representative with the Federal Emergency Management Agency when he advised Dangler on how to successfully underbid for the contract in 2006, according to the indictment. During the time he was assisting Dangler’s company, he also was negotiating to work for it, the indictment said.

At the time, 3-D was based in Fort Pierce, Fla., and Blevins lived in Texarkana, Texas.

Blevins, who had worked for FEMA since 1997, had acted as the FEMA technical representative on an earlier contract between the agency and Dangler and his company.

That meant the company and Dangler were prohibited from participating in other federal contracts in which Blevins was involved, according to the indictment.

Blevins also was prohibited from assisting or advising the company and from seeking employment with the company until he was granted permission by the proper FEMA official.

Instead, according to the indictment, beginning in January 2006, Dangler and a person identified as B.S.D. worked with Blevins and his girlfriend, identified as “K.L.,” to prepare the 3-D contract. In doing so, they falsified the firm’s number of employees and their qualifications.

The paperwork was submitted to FEMA on Jan. 16 of that year. Two months later, 3-D was awarded the contract, which was to begin in May.

Between November 2005 and April 2006, Dangler and Blevins had discussed Blevins going to work for 3-D if FEMA awarded it the contract, according to the indictment, including at a meeting at the Hilton Riverside in New Orleans. The company paid to fly Blevins and his girlfriend to New Orleans.

On April 14, 2006, Blevins resigned from FEMA, according to the indictment. Between June and November, he was hired by unnamed joint venture companies owned by an individual identified in the indictment as “T.C.” who was also “involved” with the 3-D Disaster Services contract. In 2007 and 2008, Blevins was paid directly by 3-D with proceeds from the FEMA contract, according to the indictment.

Blevins failed to inform FEMA of the job offer and failed to get permission to discuss it, again in violation of federal regulations, the indictment said. But both Dangler and Blevins told others that Blevins had written permission from FEMA’s ethics officer allowing him to go to work for the company and to participate in the contract talks, and that Dangler had confirmed that approval in a conversation with the ethics officer.

The disaster services company was paid more than $31 million by FEMA between May 2006 and January 2010. The indictment does not say anything about the quality of the firm’s work.

But the firm never would have gotten the job had FEMA known of the relationship between the defendants, or if the agency had known 3-D’s bid contained false representations, the indictment says.

Federal officials began investigating the company at some time before December 2008, when FBI and Homeland Security investigators confronted Blevins’ girlfriend “concerning her false and fraudulent testimony” about the contract before a federal grand jury in New Orleans.

Over the next three months, Blevins urged and harassed her “to provide false and inaccurate testimony” to federal agents “to cover up and conceal his commission and participation in a federal crime,” the indictment said.

The Times-Picayune reported in May 2006 that competing bidders were questioning the award of the service contract to 3-D because of their view that the company’s bid was unrealistically low.

FEMA’s contract specifications required five years of monthly maintenance visits to more than 13,000 units of temporary housing. As an aid to vendors preparing their bids, FEMA furnished an average of what eight other contractors had gotten per visit: $277.38. Using FEMA’s estimates, a profitable maintenance contract would require a bid upward of $201 million.

Barbara Sonnier, a consultant who worked with local vendors at the time, testified before a Senate committee reviewing Katrina contracts that the minimum price a company could bid, based on FEMA’s specifications, was $175 million.

“We are all concerned both by the unrealistically low bids and by our inability to identify companies as ‘local,’” she said.

FEMA insisted in May 2006 that the bids, others of which were criticized as being unrealistically low, were genuine and that the winning companies would be held to their prices.

“Absolutely not,” FEMA spokesman Darryl Madden said when asked whether the agency was concerned about the arithmetic underpinning the proposals. “The companies here are sought-after, reputable ones, and I am sure they do their due diligence when they come up with their prices. I have no reason not to think that.”